Mark Receives a Proportionate Current (Nonliquidating) Distribution

question 117

Multiple Choice

Mark receives a proportionate current (nonliquidating) distribution. At the beginning of the partnership year, the basis of his partnership interest is $100,000. During the year, he received a cash distribution of $40,000 and a property distribution (basis of $30,000, fair market value of $25,000) . In addition, Mark's share of partnership liabilities was reduced by $10,000 during the year. How much gain or loss does Mark recognize; what is his basis in the property he received; and what is his remaining basis in the partnership interest?

• A) $25,000 loss; $25,000 basis in property; $0 remaining basis.
• B) $30,000 loss; $30,000 basis in property; $0 remaining basis.
• C) $0 gain or loss; $25,000 basis in property; $25,000 remaining basis.
• D) $0 gain or loss; $30,000 basis in property; $20,000 remaining basis.
• E) $0 gain or loss; $30,000 basis in property; $30,000 remaining basis.

---

Definitions:

Substantial

Something of considerable importance, size, or worth.

Segmentation

The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behaviors, which might require separate products or marketing strategies.

Targeting

The process used by businesses to focus their marketing efforts on a specific audience or market segment.

Positioning

A marketing strategy that aims to establish a brand or product in the mind of consumers, distinguishing it from competitors.